Did anyone mention the positive points of PDT. Like increased margin (4x1) I have not used the PDT rule so I dont know if many brokers are really allowing the increased margin.... Has anyone capitalized on the increased margin??
If it's there to protect newbies, then shouldn't there be a clause to it which says "This rule applies to traders who have been trading less than _[x number]_ months. " The rule is applied to all margin accounts with less than $25,000, regardless how long the account's owner has been trading, regardless how long the account has been open, regardless of how much the account was opened with, and regardless of how many other accounts (and total combined capital) the owner of this account may have. Apply the rule to all new traders for a certain period of time. That would be fair. or: Apply the rule to all new accounts for a certain period of time. That would be fair also.
You're more likely to get to $25,000 then the rules changing Quit complaining, work hard and soon you'll have $25,000 to daytrade
The increased margin is one of the ways this rule illogically and greatly increases risk to traders, while claiming to have been designed to limit risk. It's a trap. They will give you 4:1 margin during the day if you have over $25,000. But at the close of the day they will yank your maintenance requirements back to 2:1. This extra leverage is going to wipe out far more $25,000+ traders than the numbers of "undercapitilazed newbies who wipe themselves out" with under $25,000. This 4:1 intra-day margin is more risky than anything these rules claim to be counteracting. Do not fall into this trap. Topguntrader, they're trying to suck you in so you can be wiped out so they can sneer at you for being a naive newby who has no business playing the markets and deserves to be wiped out for your own good. The people who voted for the last choice in this thread's poll will do just that, and they'll say you had it coming.
What about commission houses? Do they really want these rules? It is not necessary to be a genius to predict that THEY WILL LOSE A LOT OF COMMISSIONS AND ACCOUNTS. Greco
The idea that the government is out to "protect us" from ourselves in this regard is totally ludicrous. Get real!!! And is anyone so gullible to think that's the intention behind this? Ha. Perhaps the government should put a restriction on who can gamble in Las Vegas based on their net worth. Maybe soon they'll have a rule where you can only sit at a black jack table if you have a government issued I.D. card stating your liquid net worth is over $25,000. And you can only sit there for a half hour three times a week if you're under $50,000. Give me a break!!! I'd like to see them try to get that through in Nevada, although if Ashcroft or some of the others had their way perhaps that would be the rule. And maybe they'll also have rules on who can buy lottery tickets and how many they can buy each week. The other thing is, the 4 to 1 margin was IMO a way to keep the bulk of daytraders from lobbying strongly against this unjust, ludicrous rule. And it seems to have worked. I agree about SSF"s being very vulnerable to this too. Seems like they want to phase all trading under these restrictions slowly so there won't be too much of an organized backlash. PDT = Big Brother at Work
Well, they earn much less comparing if there is no PDT rules on stock and stock options. Apparently, traders trade much less. Also small investors get wipe out even quicker. The industry are killing goose laying golden eggs. That's why they are trying very hard to whipping small investors to commodity future trading, where again sooner or later few will survive and pay commissions. That's why brokerage is very risky business to run. You will not see many brokers in one year from now. They will be wiped out completely due to both low commission income and high risk trading. Some analysts doubt if SIPC has sufficient fund to bail out all investors with those firms. JMHO.
One more thing, IMO, even getting rid of PDT rules will not be a big deal to save these firms. Only strong firms in competition can survive. They must be the best in all respects, especially including robust finance and customer service.